Published on 12th August 2024 at 9:02

Qantas has joined Rio Tinto and BHP as foundational investors in a new fund that will develop high-integrity, nature-based carbon projects in Australia.

Managed by Silva Capital – a joint venture between investment managers Roc Partners and C6 Investment Management – the Silva Carbon Origination Fund aims to raise $250 million to originate and manage high-integrity Australian Carbon Credit Units (ACCUs).

It is one of the first funds in Australia to provide investors with access to supply of high-integrity ACCUs at scale, generated through land reforestation projects and integrated agriculture.

The foundational investors have committed $80 million, with Qantas financing the investment through its AUD$400 million Climate Fund. The Climate Fund was established in 2023 to enable investment into the solutions the Qantas Group requires to decarbonise, including investing in Sustainable Aviation Fuel (SAF), in partnership with Airbus.

Alongside investments in direct decarbonisation technologies like SAF, high-integrity carbon offsets will play an ongoing and critical role in difficult to abate industries such as aviation. The Australian Government’s Safeguard Mechanism Policy and the Paris Agreement’s global emissions reduction targets are expected to increase the demand for high-integrity carbon projects.

Qantas’ investment in the Silva Carbon Origination Fund will help to meet its compliance obligations and progress its climate targets with verifiably high-quality, high-integrity carbon credits. Importantly, the fund will also help scale quality, nature-based carbon credits in the Australian market with social and economic benefits for local communities.

Silva Capital acquires agricultural land in Australia to develop carbon sequestration projects that actively promote sustainable agricultural and land management practices. Uniquely, these projects create biodiversity, economic and conservation benefits as the fund prioritises planting projects that reforest cleared land while ensuring it can also remain productive for farming.

Chief Sustainability Officer Andrew Parker said the Silva Carbon Origination Fund would further Qantas’ commitment to evolving its carbon portfolio to align to nature-based solutions.

“For hard to abate sectors, such as aviation, high-integrity carbon offsets will play an important role in achieving climate targets. We expect the demand for carbon offsets to continue to grow into the future and it’s going to take partnerships across industries to enhance the overall availability of high-quality, high-integrity carbon credits,” said Mr Parker.

“The Silva Carbon Origination fund will enable us to continue to elevate our carbon market strategy, while also helping to positively shape the development of the overall industry.

“We’re continuing to evolve our carbon portfolio to not only include high-quality, high-integrity carbon projects but also align to nature-based solutions. Through our Climate Fund, we continue to turn our attention to Australian projects that create ecological and economic benefits.”

This investment builds on Qantas’ recent momentum, contributing to several projects through its Climate Fund. Most recently, Qantas invested in the Sustainable Aviation Fuel Financing Alliance (SAFFA) fund to help accelerate global production of aviation biofuel.

In Australia, Qantas has also invested in a Queensland biofuel production facility being developed by Jet Zero Australia in partnership with leading sustainable aviation fuel technology company LanzaJet.